Today, all types of copyrighted digital media or content are marketed and sold through the Internet. The varieties of digital media have become so large and complex that it is now impossible to classify them properly. In this specification, videos are used as an exemplary media type for the purpose of applying the present invention. However, this does not imply in any way that the present invention is applicable only to this form of digital media. The use of videos is only for presentation simplicity and a vehicle for exemplary embodiments.
Presently, copyrighted videos such as TV shows, movies, and video clips of all types, are distributed through large corporations. For small producers, the primary channel for distributing their productions is through YouTube. But YouTube is not the best way to maximize economic returns. YouTube limits the producer with 2 options: earning income through advertisement or through subscription fees. In either case, since YouTube controls the distribution channel, the producer's share of income is always at the mercy of YouTube.
An alternate channel is selling through an IPTV (Internet-Protocol TV) provider such as Amazon Instant Video or Hulu, as a pay-per-view video, or a part of a paid-subscription programming, which is similar to Cable TV bundling.
On the other hand, video consumers are restricted in their programming choice. For example, cable-TV operators offer a bundled programming (scheduling) of TV shows, which the customer has only a limited ability to customize. As a result, most cable consumers pay for the shows that they don't want in order that they can watch the shows that they want.
Therefore, both video producers and consumers are facing limited options—as a result, producers or sellers pay a high cost of distribution with limited options, while the consumers also pay a high cost of viewing with limited options.
The reason for this disparity is the high cost of video delivery infrastructure. Under the present business arrangements, the middlemen or the video distributors must own a delivery infrastructure to stream videos directly from the infrastructure to the consumer. This delivery arrangement is adopted not because it is cheaper, but because it protects the copyright of the video owners. The TV/movie industry has, from the dawn of their industry, an overwhelming concern for copyright protection.
Under the current scheme, videos are streamed chunk-by-chunk to the consumer. Further, the downloaded videos are not repeatedly playable even if they are stored. This scheme protects the copyright tightly, but at a higher cost to both producers (or sellers) and consumers.
However, the concern for copyright protection should be balanced against the efficiency of earning economic returns. The current system gives the concern for copyright protection an inordinate weight over the concern for economic returns.
From the infrastructure point of view, there is no particular reason for preferring a large-scale centralized infrastructure for video delivery as it is today. As the Internet is inherently distributed, it is possible to deliver videos completely through a distributed infrastructure that is owned by a mass of people.
Therefore, there is a need for new methods and systems to improve the economic efficiency of distributing videos over the Internet. In a similar fashion, there is also a need for new methods and systems to improve the economic efficiency of distributing non-video media items over the Internet. The new methods and systems should provide a lower cost for both distribution and consumption, with a wider spectrum of choice for both sellers and consumers. The new methods and systems should provide an adequate protection of copyrights, while raising the economic efficiency for both sellers and consumers.